In a groundbreaking move, Mudrex, a U.S.-based digital asset investment firm with a strong foothold in India, has introduced Indian investors to U.S. spot Bitcoin Exchange-Traded Funds (ETFs).
With this move, the platform, backed by Y-Combinator with a registered subsidiary in India, would become the first Indian digital asset platform to facilitate institutional access to spot Bitcoin ETFs. Edul Patel, Mudrex’s CEO and co-founder, states:
“Seeing the increasing demand for Bitcoin spot ETFs and user requests on our platform in the past few months, we have decided to launch it for Indian investors.”
Mudrex’s Plan to List Four Spot ETFs
According to Mudrex’s blog post, its plans are to list four major spot ETFs: iShares Bitcoin ETF (IBIT) from BlackRock, Wise Origin Bitcoin ETF (FBTC) from Fidelity, Franklin Templeton Bitcoin ETF (EZBC), and apparently some ETFs from Vanguard, marking a notable expansion of investment options for Indian enthusiasts.
It’s worth noting that Vanguard has not provided a Bitcoin ETF, and is strictly against the idea. It also went so far as to ban all Bitcoin ETFs from its platform, which sparked criticism among its users.
The platform stated in a release:
“Investors can choose between systematic investment plans (SIP) or lump-sum investments, aligning with their financial goals. Investors can invest in spot Bitcoin ETFs through Mudrex’s platform by completing their KYC process. This is a significant milestone for Mudrex to deliver innovative investment solutions within the rapidly evolving digital asset landscape.”
Institutional Access
This strategic initiative positions spot Bitcoin ETFs to harness the untapped potential within the Indian market. While retail clients can already access spot Bitcoin ETFs through U.S. stock investing companies, Mudrex is pioneering institutional access in the Indian Bitcoin landscape. Patel emphasized the significance of this move, stating:
“This is much more valuable to institutions, as this was already available to retailers. We are certainly the first Indian crypto platform to offer this service.”
Patel emphasized that the service would be particularly valuable for institutional investors, leveraging the strength of Mudrex’s banking relationships to facilitate seamless transactions.
A Tax-Efficient and Seamless Offering
For Indian investors looking to delve into U.S. spot Bitcoin ETFs, there are multiple avenues. Users can purchase digital asset ETFs through Indian exchanges, which impose a 1% Tax Deducted at Source (TDS) on transfers and a 30% tax on profits. Alternatively, they can also opt for the Liberalized Remittance Scheme (LRS) method, incurring a 20% Tax Collected at Source (TCS) on remittance.
Mudrex strategically plans to utilize the LRS method, allowing investors to benefit from spot Bitcoin ETFs with a minimum investment of $5,000 and a maximum limit of $250,000 within the $250,000 annual LRS threshold.
This approach impressively offers a more tax-efficient experience for users. Patel highlighted the platform’s seamless offering, stating:
“We also have strong banking relationships; we’re able to help users do these transactions in a very seamless way, and that’s why these services are important.”
ETFs Keep Moving Forward
Meanwhile, the popularity of U.S. spot Bitcoin ETFs keeps soaring, with net inflows totaling more than $9.5 billion. Despite substantial outflows from Grayscale’s higher-fee GBTC fund, IBIT’s total flows of $10.03 billion showcase a promising trajectory, further solidifying the appeal of these investment vehicles.
